LoopUp Group PLC (LON:LOOP) has reported soaring earnings in the first half of its current year as the migration to remote working during the coronavirus pandemic sparked a surge in demand for its conference call and remote working services.
For the six months ended June 30, 2020, the AIM-listed firm reported adjusted underlying earnings (EBITDA) of £12.2mln, 247% higher year-on-year, while revenues jumped 43% to £31.9mln. The company highlighted a “material increase” in demand for its core products, revenues from which grew 54% in the period to £27.9mln.
LoopUp also reported that volumes for its professional services (PS) grew 90% to 335mln minutes, while volumes at its ‘Event by LoopUp’ division climbed 88% to 3,596 events.
Looking ahead, the company highlighted “enhanced forward revenue visibility” following a material migration to committed term contracts, with 30% of LoopUp’s business coming from committed terms deals at the end of the six months as opposed to 13% at the start of the year.
However, the firm also said a “high degree of instability” caused by the pandemic made it “difficult to provide more specific guidance on near-term market expectations”, although it said it is “confident in its ability to drive attractive, sustainable and profitable growth, and intends to invest from its cash balance to maximise shareholder value creation”.
"It has been a strong and incredibly busy first half for our business as [coronavirus] has accelerated changes in working habits. We're proud to be helping our customers with their business-critical communications in these challenging times, by providing simple, reliable and secure products that are diligently operated and supported. We would like to thank our team for their tremendous and ongoing efforts”, LoopUp co-chief executives Steve Flavell and Michael Hughes said in the results statement.
“With change comes opportunity, and we're embracing this opportunity with our recent product expansion into global cloud telephony integration for Microsoft Teams. Early market reactions to our differentiated implementation have been highly encouraging, and we're confident in our ability to generate strong, profitable growth in this vibrant market that is set to grow from US$3.5bn to US$10.4bn over the next four years. We have a balance sheet that enables us to invest for growth and we're excited and focussed", they added.
In a note on Wednesday, analysts at Progressive Equity Research said Loop Up had delivered a “highly profitable and enormously cash generative” first half which had in turn allowed the company to “invest in the major identified new opportunity, to provide telephony within Microsoft Teams, where the early signs are extremely positive.
The broker also said going forward it will “loom for further evidence…around the long-term shape of the LoopUp Meetings revenue base as volumes stabilise, and the style and pace of Teams revenue growth as the business pipeline converts”.
The company’s shares jumped 6.8% to 235p in mid-morning deals.
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